InvestorQ : Is true that investors buy equities for growth?
Chandralekha Desai made post

Is true that investors buy equities for growth?

Abhisha Yadav answered.
3 years ago
Investors buy equities, which is simply another name for stocks, in order to generate growth. The ideal stock is one whose share price rises over time, allowing the investor eventually to sell at a large gain and keep the appreciation as their profit. This is called wealth creation and it is possible through equities.
The downside of equities is that they tend to be riskier than other types of investment assets. So, equities are riskier than bonds, bank deposits, FDs etc. Volatility is higher with stocks, and historically, the stock market has gone through extended periods of substantial volatility which means more losses. You put your trade and stop loss gets triggered. That is not a great feeling. Even though the long-term returns on equities are better than what investors have gotten from bonds and other investment assets, being able to handle the sometimes wild swings in value in stocks is critical. Remember the growth comes only because stocks are volatile. You are the owner of the company so you are taking the owner’s risk. You are part of the volatility and also part of the wealth creation.